Moving to Curb the Threat to Public Coffers, the Government Will Estimate Projects' 'Reasonable Profitability'

MADRID—Spain is preparing cuts in subsidies for renewable-energy production in an attempt to diminish their threat to public coffers, according to people familiar with an industry overhaul expected to be announced as early as Friday.

They said the government would unveil a more complex formula for determining the guaranteed income that producers receive for the electricity they generate from wind- and solar-energy projects. That formula would be based on the government's estimate of a level of "reasonable...